The pros and cons of a chief transformation officer

Chief trans­for­ma­tion offi­cers (CTOs) are increas­ing­ly tak­ing a seat at the top table and exert­ing a grow­ing influ­ence on the long-term strate­gic deci­sions of busi­ness­es. 

With a man­date to dri­ve change, inno­va­tion and growth, the appeal of the CTO role is clear and the advan­tages are many. But there are fun­da­men­tal mis­takes busi­ness­es and CTOs make that must be avoid­ed if the role is to be con­ducive to busi­ness trans­for­ma­tion.

Building bridges

One of the main advan­tages of hav­ing a CTO is they ensure the trans­for­ma­tion does not get lost amid the day-to-day run­ning of the busi­ness. With eyes on all parts of the oper­a­tion and at every lev­el, they are unique­ly posi­tioned to bal­ance the every­day with a strate­gic vision of the com­pa­ny.

For pub­lish­ing com­pa­ny DC Thomson’s chief strat­e­gy and trans­for­ma­tion offi­cer Rebec­ca Miskin, it is about work­ing with all lead­ers with­in the busi­ness to con­stant­ly under­stand what the biggest chal­lenges and oppor­tu­ni­ties are. She then pulls these togeth­er to cre­ate an over­all vision that both share­hold­ers and employ­ees under­stand and believe in.

“Day to day, my job is build­ing bridges, lis­ten­ing and refram­ing ques­tions, learn­ing from oth­er indus­tries and imbu­ing that into the organ­i­sa­tion, and focus­ing on out­comes and pri­or­i­ties,” Miskin explains. 

“All this is not through con­trol, it’s through influ­enc­ing. The idea is to ensure that in years to come share­hold­ers have the rewards they were look­ing for and staff are the most poach­able teams in the mar­ket, but choose to stay because of the oppor­tu­ni­ties and the val­ues of the organ­i­sa­tion.”

Key to the suc­cess of the role is “see­ing your­self as an enabler”, says UKTV/BBC Stu­dios UK’s chief mar­ket­ing and inno­va­tion offi­cer Simon Michaelides. Rather than tak­ing own­er­ship for any­thing away from any­body else, CTOs must see it as their job to facil­i­tate change.

“What a CTO can bring to the par­ty is the abil­i­ty to pick up some of the work, often quite a lot of the heavy lift­ing, that oth­ers in the organ­i­sa­tion don’t have the capac­i­ty for because of their day-to-day com­mit­ments,” he explains.

“There’s a bridg­ing role between the future and the present. While every­one under­stands the strat­e­gy and has the inten­tion to head in that direc­tion, often you’re anchored in the demands of the here and now. What a CTO does is slot in between the two and act as a bridge. You’re the only per­son who has the capac­i­ty to focus on how you get from A to B.”

Taking ownership

One of the major mis­takes busi­ness­es make when they hire a CTO is they remove own­er­ship of the trans­for­ma­tion ini­tia­tives from the line or the man­agers.

“That is absolute­ly the wrong move,” says McKinsey’s trans­for­ma­tion senior part­ner Richard Hud­son. “We fun­da­men­tal­ly believe trans­for­ma­tion needs to be line owned and line man­aged, and the peo­ple who design these ini­tia­tives are the peo­ple run­ning the busi­ness.

“They need to buy into them and they need to accept them, because they are ulti­mate­ly the peo­ple who are going to have to live with the con­se­quences of them after the trans­for­ma­tion.”

Effec­tive CTOs will build cross-func­tion­al project teams and involve the day-to-day busi­ness with the trans­for­ma­tion ini­tia­tives from the begin­ning. This will ensure their role is not seen as siloed from the rest of the busi­ness and every­one sees trans­for­ma­tion as their job too.

“Where I’ve seen it done bad­ly is where indi­vid­u­als end up build­ing an ivory tow­er around them­selves,” says Michaelides. “What you then tend to see is the day-to-day busi­ness units then reject the work, they devel­op not-invent­ed-here syn­drome and they reject it because they don’t feel like they’ve been lis­tened to or they haven’t had a hand in influ­enc­ing the shape of a project.

“Then equal­ly you have a lot of great work going on in those ivory tow­ers, but it’s not get­ting any trac­tion because it doesn’t have some­where nat­ur­al to live.”

Hire higher

Anoth­er mis­take busi­ness­es make is they “under-gun” the role in terms of senior­i­ty and end up with some­body who is more of a process per­son or a project man­ag­er, “who checks in on how things are going, but doesn’t add any val­ue to the trans­for­ma­tion”, says Hud­son.

“CTOs have to be seen as equal to the rest of the exec­u­tive com­mit­tee, if not slight­ly above,” he says. “Ulti­mate­ly this per­son is going to be lever­age for the CEO so the organ­i­sa­tion needs to under­stand that when the CEO is not in the room, the CTO and CEO are con­nect­ed at the hip and there­fore the CTO is talk­ing for the CEO. That way you can get the lever­age effect from the CEO.”

With this in mind, there are clear advan­tages to hir­ing some­body who is already in the exec­u­tive team. Michaelides was UKTV’s chief com­mer­cial offi­cer before tak­ing on the CTO role. This meant strong rela­tion­ships with the rest of the lead­er­ship team were already in place and he was plugged into the day-to-day busi­ness con­ver­sa­tions and aware of all the work going on.

There is an inter­est­ing ques­tion of whether the CTO role is time bound or per­ma­nent and nat­u­ral­ly this will depend on what the busi­ness is try­ing to achieve.

While Michaelides’s time as CTO was a “nat­ur­al evo­lu­tion” that hap­pened in phas­es and came to a nat­ur­al end after sev­en months, he has retained all of the future-fac­ing inno­va­tion work in his new role as chief mar­ket­ing and inno­va­tion offi­cer.

Sim­i­lar­ly, DC Thomson’s Miskin sees her role evolv­ing and is not expect­ing to be doing what she is today in a year’s time, “let alone three”. Whether that is under the same title or a dif­fer­ent job descrip­tion, Miskin will “embrace uncer­tain­ty” because that is what CTOs do.